IRS chief, GOP clash over tea party

The newly minted chief of the embattled IRS said Wednesday he wanted to start with a clean slate and move beyond the tea party controversy that dogged the agency last year.

Republicans are not quite there yet.

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IRS Commissioner John Koskinen, coming off a long career helping troubled organizations turn around, said a top agency priority is to move beyond the blight of its extra scrutiny of conservative groups to focus on taxpayer services, Obamacare and implementing a law to clamp down on foreign tax evasion.

“Nobody wants this investigation to be completed sooner than I do,” Koskinen said at a House Ways and Means subcommittee hearing — his first hearing since assuming his post. He added later: “I’d like to close the 501(c)(4) issue.”

But Republicans, including House Ways and Means Chairman Dave Camp (R-Mich.), are not ready to turn the page.

Camp accused the agency of secretly working on proposed regulations, put forward by the Treasury and the IRS last November, to clarify what the government considers political activity for 501(c)(4) groups. The rules are generating massive public interest with more than 21,000 comments — a record, Koskinen said.

Camp wants the rules put on hold and contended those regulations were in the works well before an inspector general’s report revealed the extent of the extra review given to the conservative groups.

Last May’s inspector general report led President Barack Obama to fire then-acting IRS Commissioner Steven Miller, with several other officials exiting thereafter. The FBI and several congressional panels are still probing the matter.

No White House involvement or political motivation has been discovered. And Democrats have released documents suggesting progressive groups were subject to some targeting as well.

Camp pointed to an email between an official in the Treasury Department’s tax policy office and the IRS, discussing possible regulations for 501(c)(4)s. An official said they were on her “radar” and “we mentioned potentially addressing them (off-plan) in 2013.”

Off-plan is a term used by the Treasury to described issues of interest that are not yet ready to be included in an annual public list of agency priorities.

“The regulations were [presented as a] remedy to the target[ing] when in fact they were being worked on in 2011,” Camp said. “I’m pretty sure [off-plan] means hidden from the public.”

A Treasury representative said it should not come as a surprise that the Treasury was aware of the 501(c)(4) regulation problems before the inspector general report.

“It’s not surprising that we would evaluate updating these regulations, which were established in the 1950’s. Treasury and the IRS have received public comments over time requesting that regulations on tax-exempt organizations be updated and we are always evaluating public input,” the person said.

“All of these efforts to tie this to the White House have been fallacious,” said Rep. Sander Levin (D-Mich.), the Ways and Means ranking member.

Koskinen said the agency is making headway tackling the backlog of applications from groups seeking nonprofit status, with 95 percent of the applications that were waiting having been resolved. About 85 percent of applicants had their applications approved.

Obama was asked about the matter in an interview on Sunday and said there was no scandal, angering conservatives.

“The president claimed there was not ‘even a smidgen of corruption’ at the IRS, and he blamed the targeting on ‘bone-headed decisions’ by ‘a local office,’” said Rep. Charles Boustany (R-La.), the chairman of the Ways and Means Oversight Subcommittee. “Now, this committee has actually investigated the matter and found otherwise. The president’s staff is either ill-informed or they are misleading him.”

Early on, senior IRS employees, including tax-exemption chief Lois Lerner, suggested that the targeting was orchestrated in Cincinnati, though it was later discovered that officials in Washington were aware of the added scrutiny.

Republicans said the panel’s probe has been held up by the IRS not turning over every email requested by Congress, including all emails related to Lerner.

Lerner ignited the controversy by revealing at a Washington conference that the IRS was targeting nonprofit groups for review based on their names. She was ultimately put on probation and resigned last year after taking her Fifth Amendment right to not testify at a House Oversight hearing.

She has become a central figure in the scandal, with Republicans especially focused on her role.

The committee does have every email from the “time period in question” from Lerner, Koskinen said, and the agency is working to get more emails. Lerner worked at the IRS for about 12 years.

The IRS has sent more than 500,000 pages of documents to Congress, with 150 people working full-time on providing the documents, Koskinen said.

Republicans also took aim at $62.5 million in performance awards that Koskinen said he would reinstate this week. The awards were the subject of a dispute with the IRS union.

Boustany said the decision to award bonuses undermines the pleas by IRS officials that it is underfunded.

Democrats defended the agency and said it is doing the best job it can with diminished resources.

Koskinen said the agency needs “adequate resources” to be able to fulfill its multiple responsibilities, including implementing Obamacare.

The Obama administration asked Congress for nearly $13 billion for the IRS in its last budget, but Congress slashed the agency’s budget, giving it $11.3 billion as part of the omnibus budget bill approved in January.

The IRS has 8,000 fewer workers than it did in 2010, which has pushed up wait times for taxpayers seeking help from the agency, with nearly 40 percent of calls going unanswered.

Koskinen said those numbers are “unacceptable” but said the agency can’t do much more without an increased budget.